Those who have studied development economics will be familiar with the term ‘resource curse’ – a paradox of plenty, when countries or regions with abundance of natural resources tend to have less economic growth and worse development outcomes.
The recent developments in Greece reminded me of another phenomenon – finance curse – which is a story about ‘country capture’ where an oversized financial sector comes to control the politics of a finance-dependent country and to dominate and hollow out its economy.
One particular quote seems to be so timely to mention here: “Beyond a certain point, financial development is bad for an economy. Instead of supplying the oxygen that the real economy needs for healthy growth, it sucks the air out of the system and starts to slowly suffocate it.”
You can read more about finance curse here.